Nets move to Brooklyn Getting Clouder Every Day ? ? ?

PRUDENTIAL CENTER in Downtown Newark: Maybe the Nets should just move to Newark vs. Brooklyn after all . . . .

At one point, the Nets were moving to a new arena in Brooklyn in 2008, then 2009. Now it may even be 2010 before the new BARCLAYS CENTER opens up. Perhaps at some point, the team should just move to Newark (as originally planned) and move into the PRUDENTIAL CENTER with the NHL Devils. Though the owner keeps saying the money is there to build the project, the credit market keeps tightning and it's becoming harder to finance huge commercial projects and they are getting mothballed (see Trumps proposed project in Uptown CLT as an example).


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NJ group explores bringing Nets to Newark

by Ian T. Shearn/The Star-Ledger
Thursday May 01, 2008, 12:05 AM

The Prudential Center in NewarkThe owner of the Devils hockey team and Newark Mayor Cory Booker are seeking to assemble a group of investors to buy the Nets and move the basketball team to Newark, according to people familiar with the effort.

In recent weeks, Devils owner Jeffrey Vanderbeek has met with Nets owner Bruce Ratner, while Booker has spoken to an official at Ratner's development company, Forest City Ratner Cos., according to three sources with direct knowledge of the discussions. The outcome of each talk was characterized as "open-ended." The parties spoke on the condition they not be identified.

The effort to bring the Nets to Newark, where they would play in the Prudential Center along with the Devils, comes amid growing speculation on whether Ratner can complete a $4 billion retail and residential development in Brooklyn, given the deepening crisis in the credit markets. To date, there is no indication the Nets are for sale, and Ratner repeatedly has said he is happy owning the team and looks forward to moving to a new arena in Brooklyn.

"The team is absolutely not for sale," Ratner said through his spokesman, Howard Rubenstein. "We're inches away from completing the deal in Brooklyn."

At the same time, one of the sources said Vanderbeek has been approached over the past two years by a half-dozen people who have expressed interest in investing in a Nets purchase. It was unclear whom Vanderbeek and Booker have spoken to about a potential purchase. But two of the sources said Booker also has tried to entice Ratner by offering him development possibilities in Newark.

Asked this week about his interest in the Nets, Vanderbeek would say only: "The Nets have stated they are going Brooklyn. We wish them all the luck in the world."

Booker's office declined comment.

Officials who follow sports and development in the region said Ratner still faces challenges in moving the Nets to Brooklyn from their current home in the Meadowlands.

"This is like a death watch," Senate President Richard Codey said of the delays in the project. "Not a single piling has gone in the ground."

Carl Goldberg, chairman of the New Jersey Sports and Exposition Authority, said he believes the Nets could remain where they are.

"The likelihood of the Nets actually building a new facility in Brooklyn and leaving our facility at the Izod Center is diminishing by the moment," Goldberg told a group of Star-Ledger editors in February. "The cost of steel and concrete and the challenges of building a facility of that nature over the railyards are becoming more difficult."

The Nets were supposed to move from the Izod Center in East Rutherford to the new Barclays Center for the 2008 season, but that date recently was pushed back to 2010.

That delay is the latest setback for the project, one of many large-scale private/public efforts being delayed or scaled back across the nation. Finance experts say the sub-prime mortgage crisis that has paralyzed financial institutions is making banks close their lending windows for projects of this magnitude.

Even Ratner's executives have conceded the uncertainty of obtaining money for a $950 million arena, as reflected in a January court filing by Andrew Silberfein, Forest City's director of finance:

"The credit markets are in turmoil at this time. Many lenders and bond insurers are facing financial difficulties, and are becoming much more cautious. ... There is a serious question as to whether, given the current state of the debt market, the underwriters will be able to proceed with the financing for the arena."

Wednesday, Ratner, through Rubentein, said the affidavit is no longer accurate. "We are very confident we will get the funds necessary for the arena. During the past year, we closed on two of the largest construction deals in our company's history, totaling more than $1.3 billion, and we expect to do the same here."

Lawrence Swift, a partner at Troutman Sanders, a Manhattan law firm that specializes in sports facility financing and other large transactions, said major investment banks have hiked interest rates and fees, which dramatically raises the cost of bond deals to their sponsors.

"All of the things being sold in the market are being pulled back," Swift said. "People don't want to pay the price to market things for any long-term paper."

This week the investment banking firm Goldman Sachs, which was hired to lead the financing for the arena, reaffirmed its commitment. Michael DuVally, a spokesman, said in an e-mail Goldman Sachs is "confident we will close on the financing for the project by the third quarter."

The Nets team, which Ratner bought for $300 million in November 2005, is now worth an estimated $338 million. It is losing $40 million annually, team officials recently announced.

But Nets chief executive Brett Yormark brushed aside any financing concerns, noting Ratner just got a $680 million construction loan to build a separate 900-unit luxury rental tower in Lower Manhattan, to be designed by Frank Gehry.

"When you have a great project and you have people that want to be involved in the project, you can get financing," Yormark said.

On a recent trip to Europe, Yormark said he met with 10 potential Barclays Center "founding partners" that would get exclusive advertising rights in their category at the Brooklyn arena.

"We've got incredible interest," he said.

But George Zoffinger, former chief executive of the New Jersey Sports Authority, said a billion-dollar arena would make it impossible to turn a profit.

"When you start to spend north of $500 million for an arena, you can't generate the cash flow necessary to generate a decent return on the investment," Zoffinger said. "If the number is $900 million, it's absolutely, positively not viable from an economic standpoint."

If the Nets continued to face delays in Brooklyn, the arenas in Newark and East Rutherford could find themselves in another battle for the team. Last year, the Devils moved from the Meadowlands to Newark.

Bringing the Nets to Newark would be another a boon to the Prudential Center, said T.J. Nelligan, a sports marketing expert. Most successful arenas book at least 200 dates a year, and if the Prudential Center had a professional basketball team to go alongside the Devils, it would be halfway to meeting that goal before booking a single concert or family show, he said.

"You really need more people fighting for those dates to make it more profitable," he said. Plus, "it would help the value of your sponsorships, it would help drive traffic to the arena, it would help sell food, merchandise, everything."

Perhaps the most significant factor is that the Prudential Center would have one fewer competitor to worry about if the Brooklyn plans fell through, said Gary Bongiovanni, editor in chief of Pollstar, a concert industry magazine.

"It may well be that the biggest boon would be not so much that the Nets moved but that the competing arena went away," he said. "The Nets could move to Vermont and Prudential would be happy."

As for the Newark rumors, Yormark said: "I take it as a complete compliment that the Prudential Center would like us to call them our home. Unfortunately that's not going to happen, but I view it as a complete compliment."

 

Trumps project is a bad example..they just unveiled a new website for the project and theres is an ad in the Program Guide for this weekends Wachovia Championship.


I always wondered why they didnt just move into the Rock. I guess a Brooklyn #23 Lebron jersey would be the top seller in the league.

 

Short Version of Long Story: When YankeeNets owned the Yankees/Nets/Devils, they were working on a plan with the City of Newark/State of NJ to build a new arena to replace Continental Airlines Arena (which is today's PRUDENTIAL CENTER). For whatever reason, a deal couldn't be reached. Also during this time, the Nets (and later on the Devils) were sold off. Bruce Ratner cut his deal with Brooklyn while the new Devils owners cut their own deal with Newark/State of NJ to build the 'The Rock' . . .